Frequently Asked Trust Questions

Must I have a trust to use your investment services?

No. Many of our clients choose trust arrangements because of the unique advantages they offer; however you are not required to have a trust agreement to utilize our investment services. We provide the same level of service to those individuals who maintain "agency" accounts with our Trust Department. 

What are the advantages of a living trust?

A living trust is an unexcelled way to plan successfully.

With a living trust, you gain the peace of mind that comes from professional, personalized investment management. At the same time, our services as trustee can free you from many time-consuming chores associated with the care and handling of securities.

Your trust also can provide an important element of financial protection if ever you become ill or incapacitated for a prolonged period.

If you wish, your trust can continue beyond your lifetime as a source of income and support for one or more loved ones. 

Is it difficult to set up a living trust?

No. The trust agreement must be drafted by an attorney. Any assets (i.e. securities, real estate) must be re-titled in the name of the trust. Living trusts are effective during an individual's lifetime and distinguish them from testamentary trusts (those established under the terms of a will). Living trusts created for the purpose of personal asset management are also known as revocable trusts, because the person who creates the trust reserves the right to cancel or revoke it. 

If I create a trust, can I keep control?

Yes. Usually our trust clients keep control in three ways. First, the trust agreement specifies that they may make withdrawals (or additions) at any time. Second, they reserve the right to cancel the trust. Third, they reserve the right to give new or different instructions by amending the trust agreement. 

Can I make the investment decisions?

If you wish. Most of our clients look to us for objective, unbiased portfolio supervision because they lack the time or specialized knowledge to do all the necessary investment homework themselves. However, if you wish, you may retain some or all of the investment responsibility. 

Is trust service expensive?

No. Our fees are competitive with those charged by investment advisory firms or by mutual funds and include services like recordkeeping and bill pay, which may not be provided by other investment firms. 

Do I need substantial assets to establish a trust?

If you think of millions of dollars when you hear of the word "trust," you are a victim of widespread misconception. Today's trust institutions have developed ways to handle even relatively small trusts efficiently. At Community Bank & Trust, we do not think in terms of fixed minimums. Instead we ask ourselves, "Is a trust the best way to meet this person's financial management needs?" 

How much of a return will I get on my money?

That depends on your goals, current income, long-term growth to offset inflation and on ever-changing investment conditions.

Historically, diversified portfolios of good-quality stocks have produced a total annual return (dividends plus growth in principal value) averaging around 10% annually. Bonds have produced somewhat lower returns overall, but they offer a higher level of current income than stocks.

As trustee and investment manager, our goal is to provide consistent returns over the years. We emphasize careful asset allocation, the selection of quality investments and constant vigilance. 

Does the FDIC insure trust funds?

Trust funds are primarily invested in stocks, bonds or other income-producing assets. These trust investments are not bank deposits. Securities and other assets administered by a bank as trustee are held separate from the bank's own assets, under strict audit controls and cannot be reached by the bank's creditors.

Therefore, the need for FDIC insurance is generally limited to uninvested trust cash, such as income awaiting distribution. Under FDIC regulations, uninvested funds held or deposited by the bank as trustee for a revocable trust are insured together with other deposits of the trust's owner up to a total of $250,000. 

How can I find out more about trusts?

Our trust and investment professionals will be glad to assemble further information for you, analyze your investment requirements and answer any of your questions.

For questions or more information, please contact any member of our Wealth Management Team.